2016’s Most Influential FinTweeters?

Editor’s note we had no involvement in this post which was based on Sentieo algo bout would like to thank them or their computers regardless for ranking us at #17 most influential. You can follow us on twitter here. Also check out this other smallrt list by Sentieo – we would like to thank them for adding us (again we had no involvement) for their more human based approach which included us both among best finance news and aggregators on Finance Twitter.

As part of our curated Twitter feature in our Equity Data Terminal, we have mountains of data on the most influential finance Twitter accounts. To our surprise, the most influential accounts aren’t professional content creators or major news organizations. Nor are they famous money managers with billions in assets under management.

While many equity analysts currently do not use finance Twitter, the early adopters of finance Twitter likely stand on the vanguard of where news is headed. Firstly, traditional news outlets like newspapers and TV shows must create filler content on a slow news day. Social media is a more flexible channel for receiving news, expanding where there is news (e.g. Trump winning the election) and contracting when there isn’t. Secondly, curation by peers lets the cream rise to the top. Formerly obscure research such as AZ Value’s blog was distributed on finance Twitter well before Valeant issued an 8-k rebutting AZ Value (and before the dramatic fall in Valeant’s share price). That type of niche content is unlikely to appear in more mainstream channels.

As we get ready for 2017 and spending at least the next four years with a Tweeter-in-Chief in the White House moving markets, we often find our client conversations turning towards the effective use of social media in professional investment management. Consider this your cheat sheet.

High Level Takeaways

FinTwit’s most influential accounts are dominated by equity analysts who put out insightful content in their spare time.

Second to equity analysts, there are the activist shorts that use Twitter to promote their campaigns. Like it or not, their ability to move markets makes them relevant and difficult to ignore.

Following the activists shorts, there are niche news accounts (e.g. Activist Shorts, Marketfolly) that mainly aggregate content and curate news specifically for equity analysis. These accounts are far more influential than the official accounts of major news outlets, suggesting that most of finance Twitter prefers the curation of peers and aggregators.

The big picture is that peer-curated news is poised to become a bigger headwind for traditional news. Whereas many newspapers previously enjoyed local monopolies, they now face massive competition in a social media world. This is a world where anybody can create, distribute, and promote their content. There are no barriers to entry anymore. News titans like CNBC and Bloomberg (with their teams of professional journalists) have fewer finTwit follows than a hedge fund manager from Australia who blogs on the side (@John_Hempton). If social media’s popularity grows, the trend will likely continue to erode the returns on capital that traditional media companies have enjoyed.

Specific data points

As a technical refresher, Sentieo ranks influence by applying node principal component centrality on a curated list of top Finance twitter accounts and this helps to adjust for hyperactive or simply longer-tenured tweeters. As this can be rather inaccessible to the less mathematically inclined, we will proxy with number of mutual follows in the rest of this article.

We manually curated a list of 118 finTwit users and looked at the accounts that they were following. Manual curation means that bots and fake accounts do not affect our popularity data. In the data points below, “81 followers” means that 81 out of 118 users in our manually-curated list follow a particular account.

Finance Twitter’s 2 most popular accounts are John Hempton and Barbarian Capital. Their popularity is slightly ahead of aggregation/curation-heavy accounts like Activist Shorts and Market Folly. News titans like CNBC and Bloomberg trail in popularity.

Also note that many journalists are more followed on Twitter than the news organizations that they write/freelance for. The whole is not greater than the sum of its parts. This fits into the overall pattern of some individuals outpacing news titans in terms of popularity.

A word on Fake News

If you are already nauseated at the prospect of yet another rehash of the Fake News issue, we’re with you. We just want to comment on how we can control for this in Finance Twitter land as this is a very legitimate concern for skeptics who need to base their trading decisions on news that, well, is not fake. The curated source list is a good first cut, but software can get you a lot further along with active vetting of news items by trusted sources. Nuzzel is a great app that helps you get this done.

Closing thoughts

Social media, whether it’s Facebook or Twitter or emails from friends, is increasingly becoming the way people consume news. While some technological changes take time, the inflection points tend to be swift. At the beginning of this millennium, investors were excited over the prospects of the Internet and participated in the Dot-Com Bubble. It took more than a decade for the Internet to make phone books obsolete. But when it happened, some over-leveraged phone book stocks entered bankruptcy protection more than once. Will history repeat itself for news stocks? Time will tell.

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Author: SentieoAs former hedge fund analysts, we are very familiar with the challenge of digging through an inhuman amount of information to find that one key data point that makes or breaks your investment thesis. With new datasets appearing daily, your job as an investor continues to grow more challenging and complex. This is why we built Sentieo.
Sentieo is a financial data platform underpinned by the latest search technology. We overlay search, collaboration and automation on key aspects of an analyst's workflow so that you can spend less time searching and more time analyzing.
Don’t take our word for it. We would love nothing more than to show you what we have built.